These offer you the chance to talk directly to potential customers and get their feedback.

You can also just check social media and conduct a keyword search on Google.

What are the people searching solutions for?

What are the pain points in current products and services that people mostly complain about on social media?

The other channels you should focus on browsing for real customer pain points include:

Looking at these elements can help you identify the struggle customers have with existing products and the queries they are trying to solve.

Unlike some market research reports, the information you get is accurate and up-to-date. You do, in fact, get it in real time with the real language customers use to describe their pain points.

#2 Validate important financial metrics

You should also validate important financial metrics.

Indeed, when it comes to investor interest, finances are at the top of their concern list – investors want to see what your growth predictions are and more importantly, what results do you base these predictions on.

What are the top metrics a startup has to focus on?

The key at the early stage is on actionable metrics. These are specific and observable metrics. The metrics that could change if you made changes the product or the service.

Eric Ries, entrepreneur and investor, has written a superb guest blog post on the topic and it’s definitely worth a read.

Essentially, Ries is saying that you want to focus on actionable metrics instead of vanity metrics because the former helps you understand and improve your product or service.

A vanity metric, such as a specific number of clicks on a website, is not going to tell you anything. People clicked your website, so what?

Instead, you want to look at which sources result in clicks that lead to conversions. Perhaps a guest blog you did is adding to clicks and 98% these lead to a sale.

In terms of validating your financial metrics, fast iteration times are crucial. You don’t want to spend months developing a fledged out version of a product only to find out no one wants it.

The point is again well illustrated by Tom Fishburne for the book “Talking to Humans.”

You can’t keep testing forever if your metrics don’t show traction or boost in revenue. Do start iterations and move on or tweak your product if the data is telling you to do so.

On the other hand, don’t wait forever to talk to investors about the traction you are getting. You don’t need 500,000 customers before you can start talking to investors!

Why investors like this more?

OK, it sounds all fine and dandy but what is the benefit of doing that?

Why would an investor give you 3, 4, 5 times more money just because you’ve gone out and validated your assumption in the real world?

The above shows you’re not just assuming things about your startup.

You’re not just theorising about the possibilities and especially the pain points. Indeed, you’re actually creating a startup that answers real customer pain points instead of projecting problems on to them.

You know what customers want and you can show the investor that.

You can make a statement, “Customers want to receive their products faster – in one day – and they are willing to pay for it” and when the investor objects to you being able to know this, you can say, “I’ve asked x number of people and this is what they all say”.

In terms of the finances, as I’ve mentioned, investors care about growth above anything. They need to get 10x returns or they aren’t happy.

Sure, you could just promise this based on predictions.

But showing them actual growth that projects further growth is definitely more convincing.

“Some people may object to money being the central purpose of a product…but since money pays for salaries, electricity, office space, health benefits, taxes etc. the success of the product must somehow be traceable to this.”

Create a prototype

Of course, you also need to focus on developing your actual product or service.

Focus on the primary user and the core problem you want to solve. Don’t focus on the symptoms, just the problem.

Add the main functionalities that validate the customer pain point and leave out anything else.

Define the metrics that you can use to test the functionality of your MVP. Use the SMART goal strategy (Specific, Measurable, Achievable, Relevant and Times).

Create a proper feedback route – do both observations and consumer-led analysis.

When you’re creating an MVP, you should use existing products or services. You don’t need to create everything from scratch.

For example, allow the customers to log into your product with Facebook login, instead of creating the whole system from scratch.

You also don’t want to just focus your efforts on a single MVP. It’s much more effective to create multiple testing cycles, perhaps with little tweaks. As you get responses, you can plan the next iteration.

Why investors like this more?

The reason creating a prototype works better than a business plan is because it actually shows how the product or service will perform.

We can all create and design crazy-good products on paper – making them work in the real world, with real limitations and regulations is a different thing.

You can see how the product performs, how customers actually would use it and then use the information to perfect and improve.

Again, you’re not just assuming things will work a certain way, you are actually figuring out how the performance will be.

Now, you might be thinking this is all good but why would the investor care how the product works? Aren’t they just there to make money?

Well, prototypes not only show the investor you actually know how to make your product idea work – and that it actually works. But they also give important information regarding the financials.

When you build an MVP, you get a much better idea of how much the product will actually cost to manufacture.

You learn about the production cost and the cost of things going wrong.

Again, this ensures the metrics you use to calculate things like revenue and CAC are relevant, reliable and data-driven.

Acquire real customers

The final important thing you should be doing instead of wasting time writing a business plan is all about creating a customer base.

It’s nice to have an idea for your startup and a hefty book-like business plan.

But it’s not going to pay your bills, now is it?

If you strip down a successful startup to its core, the main thing would be the startup’s ability to attract paying customers.

Instead of wasting time typing away your strategies to obtain customers, you should do the following:

You want to start marketing online and offline. Start with your friends and family and move beyond to reach out to your alumni or previous colleagues.

Get people talking and signing up for your product – the more interest you generate, the more people you’ll have trying to product or service right from the start.

Why investors like this more?

The reason this works better is rather obvious.

No investors would rather see a well-written business plan than a company that hasn’t figured out all the details but which still has 20 paying customers.

Your ability to have people paying for your product or service will trump any business plan – always.

If you have paying customers, a huge waiting list or just hundreds of signups, you show there is momentum and traction.

Clearly, people believe in your product or service. They are actually interested in trying it out – your idea at its purest essentially works.

Furthermore, if they are already paying for it, your business model is also validated to some extent. You can say to the investor, “Hey, look here’s my product, here’s how I’m going to make money and here’s the number of people who agree with me”.

Like I said before, you’ve proven people are actually willing to pay for your product in real life, not in theory.

Stop planning for the future and start creating the future

What you should get out from the above is not that planning is somehow a bad practice.

You definitely need to have a plan for your startup.

The point is to not waste time creating a lengthy and meticulous plan for others to read – to think that a document of 20-pages will save you from problems and help you win over investors.

Because it won’t.

You need an action plan – just for yourself.

You need to have your assumptions about your startup and the core ideas. But instead of looking at these assumptions in every angle and generating a wall of text, you need to test them.

You need to take your well-crafted assumptions into the real world. Talk to potential customers, create a prototype for them to play with and track the essential metrics.

And when you have that, you can go to the investor and you can say, “Hey look what I’ve done”.

By focusing on results, you can show how much potential there is ahead of you and the investor will invest. Wouldn’t you agree?

You might not have 5,000 paying customers and your startup might need a lot of tweaking.

But that’s the point of a VC. You need their investment to help you move forwards. That’s why investors aren’t expecting to see a fully functional startup (you don’t need money if you’re a huge hit already) or pages of plans.

They want to see momentum, they want to see proof and they want to see action.

Essentially, they like to see someone who is clearly able to get shit done and start moving.

This tells them that by putting their money in, the person is going to work hard and make money for them.

So, what are you going to do today to start creating the future you want for your startup? And what is stopping you?